Do you remember not working during the summer? Neither do I. Scooping ice cream at Oxford Creamery for just over three bucks an hour put money in my pocket. It gave me income. Freedom.
I could buy a ticket to a movie, a Coke, and Twizzlers for a few hours of work. A pretty good tradeoff. Plus, cleaning up after the baseball teams had come and gone and the mad rush over, we could cook a cheeseburger on the grill, mop the floors and have a coffee frappe for the bike ride home.
When I think about your retirement income, I think about bonds. I think about steady work. I think not about what the bonds can do for me, but what I’m doing with my hard-earned money. How to keep it safe.
Because I respect the labor that goes into building capital. Who doesn’t? (I opened myself up with that one). I respect my capital like it’s the last penny I’ll ever have. It’s why when I look to buy bonds for my portfolio, I think safety first and then, and only then do I consider the income. (Which has been rather nice of late, don’t you think?)
I never got rich scooping ice cream. But it taught me that compounding hours of labor, even at minimum wage, added up fast. The shifts flew by, too, because it was so busy. I didn’t have time to look up. It was “I’ll have one scoop of coffee, and one chocolate chip” over and over and over. It wasn’t standing around, wiping a counter here and there. It was, “Who’s next?” “May I help you?” “Would you like fries with your burger?” Then add it up by hand or in your head. A lobster roll was $4.95 with tax, four for $19.80, a one-scoop cone $0.25, two for $0.50.
My margin of safety, thank you Ben Graham, was I had a stable job and steady income. That’s how Your Survival Guy thinks of bonds. Safety first, then income. Just thinking about asking my boss Mr. Blanchette if I could have more income makes me shiver. He would have grabbed my hat off my head and sent me home.
Action Line: But I never had a problem getting steady raises. Amazing how showing up to work makes you lucky. Let’s talk about the work you’ve been putting in and how to keep that capital safe.
E.J. Smith - Your Survival Guy
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